Debtors who keep a high balance on the revolving credit card account which has no spending limit could be dinged for having a “high utilization” of the credit on the card. Any credit card which shows that the debtor uses 50 percent or more of the credit limit will have a negative impact on the debtor’s credit score because of the “high utilization” factor. If debtors want to avoid lowering their credit score they may want to limit their usage of these types of credit cards.
For post-bankruptcy debtors, credit cards which have the tendency to negatively impact their credit score should be avoided. For those exiting bankruptcy, every FICO point lost or gained can have a huge impact on their ability to get a mortgage, car loan or other types of credit especially since they are in the rebuilding phase of their credit history.